Computable general equilibrium (CGE) models have become a standard tool to quantify the macroeconomic effects of political measures. Most models assume a representative agent and often abstract from the heterogeneity of individual households. This however is of extreme importance since political reform proposals affect individual households unequally due to their specific income and expenditure structure. The analysis of such distributional effects is typically carried out with micro-simulation models. These are characterised by incorporating detailed information on the employment behaviour and income of households and individuals and by calculating tax and transfer payments based on this information. This project aims to improve and extend the already existing linking of ZEWs tax-transfer model with a CGE model. This allows the quantification of allocation and distribution effects within a consistent model framework. As regards content, the linked model is firstly applied to labour market problems. Afterwards, the model is enhanced in order to allow for an analysis of environmental policies which takes into account the detailed expenditure structure of households.
01.12.2006 - 31.12.2009